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SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) is trading at the highest level since 2007 on improving sentiment on the economy and the latest round of monetary easing from central banks.

However, iShares Dow Jones Transportation Average (NYSE: IYT) continues to languish in sideways trading and hasn’t yet confirmed the breakout in the major stock indices.

The transportation ETF is about flat for the year, while the Dow Industrial fund has gained roughly 13% in 2012.

Investors might not care about the underperformance of the transportation sector ETF, but the lackluster trading bothers adherents of Dow Theory, one the oldest and most respected models for timing the market. [Transportation ETF Trying to Play Catch-Up]

One tenet of Dow Theory is that industrial and transportation averages should confirm new highs together in a healthy bull market.